Baekgaard v. Carreiro, 14750.

• Decision Date: 08 December 1956
• Docket Number: No. 14750.,14750.
• Citation: 237 F.2d 459
• Parties: Phyllis BAEKGAARD, formerly Phyllis Irene Carreiro, Appellant, v. Genee M. CARREIRO, Irene G. Carreiro, Individually and as Administratrix of the Estate of George S. Carreiro, Deceased, and Wells Fargo Bank & Union Trust Company, Appellees.
• Court: U.S. Court of Appeals — Ninth Circuit

237 F.2d 459 (1956)

Phyllis BAEKGAARD, formerly Phyllis Irene Carreiro, Appellant, v. Genee M. CARREIRO, Irene G. Carreiro, Individually and as Administratrix of the Estate of George S. Carreiro, Deceased, and Wells Fargo Bank & Union Trust Company, Appellees.

No. 14750.

United States Court of Appeals Ninth Circuit.

October 3, 1956.

Rehearing Denied December 8, 1956.

Alfred J. Smith, Cyril Viadro, San Francisco, Cal., for appellant.

William T. Joyce, Palo Alto, Cal., for appellee Irene G. Carreiro.

Reginald G. Hearn, San Francisco, Cal., for appellee Genee M. Carreiro.

Before STEPHENS, BONE and CHAMBERS, Circuit Judges.

STEPHENS, Circuit Judge.

This action arose out of conflicting claims to the proceeds of three life insurance policies in the total face amount of $25,000.00 issued by the New England Mutual Life Insurance Company on the life of Dr. George S. Carreiro, deceased, a resident of California at the time of death. The action was filed by New England Mutual Life Insurance Company, a Massachusetts corporation, as an action in interpleader under Section 1335 of Title 28 United States Code. The issue in the case is how shall the insurance benefits be awarded as to three women and as to the assured's estate; Genee M. Carreiro, the first and divorced wife of the assured (a citizen of California); Irene G. Carreiro, his second wife (a citizen of California) and Phyllis Baekgaard, assured's daughter (a citizen of Illinois). These three were named as defendants and the proceeds from the policies were deposited in court. Wells Fargo Bank & Union Trust Company (a California corporation) intervened as the executor of the Last Will and Testament of the assured.¹

Dr. Carreiro and Genee M. Carreiro were married in 1927 and Phyllis Irene Carreiro, now known as Phyllis Baekgaard, was the sole issue.

The trial court adjudged a division of the policy proceeds among the claimants as an equitable solution of the problem and Phyllis Irene Carreiro, the daughter appealed. The insurance policy issued during the coverture of the doctor and Genee M. Carreiro with Genee, the wife, as primary beneficiary and Phyllis as the secondary beneficiary in the event that Genee predeceased Dr. Carreiro. If both primary and secondary beneficiaries predeceased Dr. Carreiro, the proceeds were to be payable to the Executor of his Will. In August, 1951, the doctor and Genee entered into a written property settlement. We have set out in part the text of the agreement in Note 2.²

An interlocutory decree of divorce was adjudged between the doctor and Genee and the final decree was adjudged the following August. The doctor and Irene Carreiro were married in December of 1952. Dr. Carreiro died January, 1954. The insurance policies in suit were in good standing and they were specifically mentioned in the property settlement between the assured and Genee, the first wife.

The trial judge expressed his disbelief in respect of testimony of conversations with Dr. Carreiro relating to the latter's intentions as to the beneficiary of the policies in suit and held that the evidence before the court was inconclusive and contradictory and ordered the proceeds of the policies to be equally divided among the three women claimants and the bank as Executor.

Appellant argues that she is entitled to the entire proceeds since the primary beneficiary, Genee Carreiro, as a legal result of the property settlement agreement waived any expectancies in the policies, and thus she, Phyllis, as named secondary beneficiary became entitled to the proceeds of the policies in suit. In order to answer this contention, it is necessary to resolve the following questions:

(1) Did the primary beneficiary, Genee Carreiro, waive or relinquish her expectancy as a beneficiary under the policies by virtue of the property settlement agreement entered into with the deceased?

(2) If Genee Carreiro did so waive or relinquish such expectancy, does that fact have the legal effect of placing the secondary beneficiary in a position to take the proceeds even though the primary beneficiary is still living, or does it mean that the proceeds go into the assured's estate?

(3) In determining the legal effect of a waiver of expectancies under the facts of this case, the law of what jurisdiction is controlling?

Legal Effect of the Property Settlement

The position of a beneficiary in an insurance policy subject to change by the insured is similar to that of a beneficiary of a Will, a mere expectancy dependent on designation at the time of the insured's death. Grimm v. Grimm, 26 Cal.2d 173, 176, 157 P.2d 841. Where a property settlement agreement covers all of the property of the parties, and the wife, in accepting certain provisions for her benefit, fully releases the husband with respect to all other property, such release ordinarily would cover and include her interest as the designated beneficiary on an insurance policy; but where the language is not broad enough to encompass such an expectancy or an intent appears to exclude such rights as a present part of the settlement, the wife may still take as a beneficiary if the policy so provides. Thorp v. Randazzo, 41 Cal.2d 770, 264 P.2d 38, 40; Miller v. Miller, 94 Cal.App.2d 785, 789, 211 P. 2d 357. For cases construing various property settlement agreements see: Thorp v. Randazzo, 41 Cal.2d 770, 264 P.2d 38; Grimm v. Grimm, 26 Cal.2d. 173, 157 P.2d 841; Meherin v. Meherin, 99 Cal.App.2d 596, 222 P.2d 305; Prudential Insurance Co. of America v. Quay, D.C., 115 F.Supp. 63; United Benefit Life Insurance Co. v. Price, 46 Wash.2d 587, 283 P.2d 119; In re Buchman's Estate, 132 Cal.App.2d 81, 281 P.2d 608.

It is evident, that in our case, the trial judge construed the property settlement agreement as effecting a relinquishment or waiver of any expectancies that Genee Carreiro had or may have had in the future in the policies. Conclusion of Law I is in part:

"Pursuant to the terms and provisions of the aforesaid policies and the terms and provisions of the property settlement agreement executed by and between Genee M. Carreiro and said George S. Carreiro as supplemented by events subsequent thereto, the proceeds of all policies were payable to neither Genee Mignon Carreiro, the designated beneficiary, nor to Phyllis Baekgaard, the secondary beneficiary. * * *"

Since Genee Carreiro was living at the time of George S. Carreiro's death and she was of record as the primary beneficiary of the policies in suit, it is clear that the trial judge could only refuse to award the proceeds to her if she had originally waived her expectancies under the policies unless there was convincing evidence that showed a different intent. It would appear that Genee Carreiro does not claim that she did not by the agreement waive her expectancies under the policies, but now claims the proceeds were later given to her, since in her "Answer to Pleading in Intervention" in paragraph II she states:

"* * * Said answering defendant and cross-complainant avers that at no time since receipt of notice of the gift of said insurance policies by the assured has she waived any rights to receive the proceeds therefrom." (Emphasis supplied.)

Whether Genee did so concede or did not, if she had affirmatively shown that such was the intent of the insured, it would have been the duty of the trial judge to award the proceeds to her. But the trial judge specifically stated that he was unable to ascertain what was the deceased's intent because, as the trial judge held, of the inconclusive and conflicting evidence and, therefore, the resort to what amounted to a compromise judicial adjustment of the issue. In this posture of the case, it was Genee's burden to convince the court that Dr. Carreiro intended that she should receive the insurance proceeds. She did not meet this burden!

We agree with the trial judge that Genee Carreiro by the property settlement waived and relinquished all right to the insurance proceeds. The policies were specifically listed and described and obviously were one of the bargaining elements between Genee Carreiro and Dr. Carreiro as to a division of their property. We note also that other things were "waived" under the agreement such as the right of each to take by Will from the other or to share in the other's estate, or to act as executor or executrix or administrator or administratrix. These provisions were held to be important considerations in interpreting the agreement in Meherin v. Meherin, supra, and Thorp v. Randazzo, supra. It was stated in the agreement that the husband was to receive the policies "free and clear of any claims of the wife thereto". (Emphasis supplied.) The only possible defect in the agreement was the failure to expand the meaning of "any claims" to include an "expectancy" under an insurance policy. But a disposition of all property rights and "other matters" was clearly contemplated by the parties. As was said in Meherin v. Meherin, 222 P.2d at page 306:

"The property settlement agreement was quite comprehensive and clearly established that a complete and final settlement was intended."

In our case not only was there made mention of community property rights, but also of "property rights" and "rights to support and maintenance" and "other matters between them". The fact that there was a named secondary beneficiary is not in itself controlling, but we think that it is an element worthy of consideration in determining what was the intent of the parties to the agreement when it was executed. Here it can be argued that the deceased did not intend to give up valuable property to his wife as he did do and in addition to create a strong possibility that his divorced wife would also get the proceeds of the policies to the exclusion of his own daughter. Thus, it is certain that the court did not specifically decide the issue as to whether or not it was the insured's intention that Genee should take the proceeds of the insurance...